The Democrats Are the Party of Bleeding the Middle Class to Death

So do you have good credit? I’m not very good about checking my credit score, although every so often I get an email from one of those credit services that tells me “Hey, your credit score is great! You qualify for all of these credit cards that will inevitably drop your credit score because you spend too much!” So I think my credit score is pretty good. I don’t know off the top of my head.

What I do know is that President Joe Biden is trying to make people who have a great credit scores are about to be punished while those who don’t are going to be subsidized.

This is a new rule coming from the Biden administration, and people with a certain credit score are going to be facing a new federal fee tacked onto their monthly mortgage payment that will be used to help those who can’t afford a down payment or a monthly note be able to afford housing.

The Washington Times raised the alert about this particular issue earlier this week:

Federal Housing Finance Agency Director Sandra Thompson, a Biden appointee, said the fee changes will “increase pricing support for purchase borrowers limited by income or by wealth.” The agency calls the overall fee changes “minimal” and said the moves will ensure market stability.

After a storm of criticism, the agency delayed to Aug. 1 an upfront fee for debt-to-income ratios of 40% or more. The ratio is calculated by dividing the homebuyer’s monthly debt payments by gross income. It’s one of the key measures lenders use to determine whether a mortgage applicant qualifies for a loan.

Ms. Thompson said the postponement will help “to ensure a level playing field for all lenders to have sufficient time to deploy the fee.”

The fee changes are intended to subsidize higher-risk borrowers by imposing “an intentional disruption to traditional risk-based pricing,” Mr. Stevens said.

This is, yet again, the growth of government by the Democratic Party to bleed not the rich but the middle class to subsidize the poor. This is equity run amok and it will inevitably lead to another housing crisis – surely if we subsidize people who can’t afford a mortgage, nothing can go wrong… right?

There are far more people in the middle class who will be hit by this than you think. $400,000 sounds like an expensive loan, but the medium cost of homes in the U.S. in 2022 was $428,700. The mean sale price? $507,800. That’s going to hit a lot of middle class Americans, especially at a time when inventory appears to be lower and an economic crisis on the horizon.

There are far more people in the middle class than there are people in the wealthiest class, and while the Democratic Party has bemoaned the shrinking middle class, what they are actually doing is ensuring that those who remain there will be punished for it. The rich won’t feel these extra fees and the poor will be subsidized by them. It’s very strange to have watched the party of the middle class go from championing them to, in effect, attempting to bleed them dry to subsidize not just the poor but people who are simply (and frankly) idiots with their money.

Basing the subsidization on credit is a costly mistake. There are plenty of people who have a lot of money and horrible credit scores and there are a lot of people with good credit scores who are barely making by each month. But you can guarantee that the latter category is not going to be happy that the Democratic Party is backing a policy that forces them to subsidize the former category. But that’s what equity does. It doesn’t lift people in need up. It drags down the people who are fine.

The end result is a shrinking middle class not because of the rich getting richer, but the middle class becoming poorer as their money is seized to subsidize others.

But the government bureaucracies the Democrats love so much will write rules and regulations like this – completely outside the scope of any legislative oversight – because it expands their power and keeps people reliant on them. In essence, they pass rules and regulations to justify the existence of their jobs.

Congress has got to do a better job of fighting back and taking back power from the bureaucracy. They have spent decades delegating their lawmaking powers away to executive branch agencies, and as a result, Americans are made to suffer.


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